Potential Large Medicare Disproportionate Share Reimbursement Opportunity

Thoughtware Article Published: Jun 12, 2020
Healthcare accounting, tax, and consulting services

CMS has recently allowed hospitals to request realignments to their Supplemental Security Income (SSI) ratios beyond the typical three-year reopening request window from the Notice of Program Reimbursement date. This creates an opportunity for Medicare disproportionate share hospitals (DSH) that may have overlooked previous periods with benefit, especially in years before the reduction of traditional DSH payments mandated by the Affordable Care Act.

The Medicare DSH payment is determined by a hospital’s Medicaid and SSI percentages. Increases in either percentage can have a big effect on DSH reimbursement. CMS computes the SSI ratio annually based on the federal fiscal year. However, hospitals can make a request for the SSI ratio to be calculated based on their year-end as opposed to the federal year. Importantly, hospitals can choose to realign only the years that are beneficial and not change the ratio in years that would result in a reduction.

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